Not only did Research In Motion, now called
BlackBerryBBRY 1.9318181818181819%BlackBerry Ltd.U.S.: NasdaqUSD8.97
0.171.9318181818181819%
/Date(1427829756044-0500)/
Volume (Delayed 15m)
:
12653392
P/E Ratio
N/AMarket Cap
4652974502.82272
Dividend Yield
N/ARev. per Employee
413926More quote details and news »BBRYinYour ValueYour ChangeShort position
(BBRY), lose sales and market share, but corporations found other software aside from BlackBerry's to manage all the new handsets coming in the door every morning.

As BlackBerry seeks to revive its franchise with new handset models—the Z10 and Q10—the company is moving on a second front, trying to restore its prominence in corporate-IT software. The stock's few bulls say a renaissance in BlackBerry Enterprise Server, or BES, software could lead to a rise in the shares, from a recent $15.54 to the low $20s or even $30 in the coming twelve months.

AT ITS BLACKBERRY WORLD user event this week, the company is expected to talk up the latest version of its IT software, BES 10, which manages not only BlackBerrys, but iPhones, and Android devices from Samsung Electronics (005930.Korea) and others. This year BlackBerry is expected to get about a third of its $13 billion in forecast revenue from mobile-device network services.

It's an uphill slog for BlackBerry. Good Technology, of Sunnyvale, Calif., is widely regarded as the market leader. Other competitors include AirWatch and MobileIron.

According to Gartner, the cross-platform mobile-device management market was probably $784 million last year. That could rise to more than $1.3 billion this year.

But the biggest prize is management of all corporate computing, as more of it goes mobile. "We're at phase 1.0 of this enterprise mobile platform," says Chris Curran, chief technologist with the advisory practice of PricewaterhouseCoopers. "The goal is being the future platform for corporate mobile applications."

For the moment, Good and the rest are simply trying to help IT managers deal with some basic problems: Employees show up at work with smartphones or tablets they bought, replete with gaming and Facebook applications, and expect to use business e-mail and documents on the devices, potentially exposing their employers to risk.

The challenge for BES software is that it hasn't established a name for itself managing anything other than a BlackBerry. "You shouldn't count BlackBerry as part of mobile-device management because they have no market share yet," says Phil Redman, who follows the market for Gartner. By that he means that today BlackBerry's service revenue comes entirely from managing BlackBerry devices.

Start-up AirWatch has 6,500 customers running all manner of devices, and the company has raised $200 million in venture capital. It is valued in the private market at more than $1 billion.

Chairman Alan Dabbiere says the BES offering falls short of capabilities needed to securely manage Apple iOS and Google Android devices, including FIPS 140, a standard for encryption. "They are woefully behind on iOS and Android, because they can't do these things," he says.

MobileIron claims 4,500 customers and has $100 million in financing. It says three of the world's top five retailers are using its technology. Says CEO Bob Tinker, "There is not an incumbent yet in this market." BlackBerry and
Citrix SystemsCTXS 0.29678225554514215%Citrix Systems Inc.U.S.: NasdaqUSD64.21
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447501
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43.37209989198394Market Cap
10232060241.3678
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N/ARev. per Employee
311760More quote details and news »CTXSinYour ValueYour ChangeShort position
(CTXS), he says, are "trying to bolt on an appendage" onto existing software.

One possible problem for BlackBerry is that its platform might not even be considered by some companies because its smartphones are in decline.

One the other hand, BlackBerry can still boast of something unique: Its "network operations center," or NOC, is a dedicated private network whose vaunted security has for years been the crown jewel of BlackBerry e-mail.

Users of BES and the NOC, points out BlackBerry enterprise head Peter Devenyi, are able to effectively lock down all devices, including iPhone and Android, to a single communications "port." That can vastly reduce the number of back doors that make devices vulnerable to hacking.

BLACKBERRY IS MAKING concessions to woo companies, giving away the BES software for free, while waiving the network fee for BlackBerry users who upgrade to BlackBerry 10 devices through the end of this year.

The BES software has garnered some prominent early customers, including Skadden, Arps and 20th Century Fox, and 4,600 companies are evaluating the software.

If even a fraction of enterprises take up BES and the NOC, bulls think it could boost the stock.

Peter Misek, who follows BlackBerry for Jefferies & Co., and rates its shares Buy, doesn't expect BlackBerry will win the smartphone wars. But with perhaps 500 million corporate users of email on mobile devices, worldwide, Misek reasons that if just 10% of them were to take up BlackBerry's offer to use the NOC, and if each one paid $100 per year, the result would be a steady $5 billion in revenue for BlackBerry annually.

Put a 42% operating margin on that, and you could be looking at $2.50 per share in earnings, for a stock worth $30 at a P/E multiple of 12. With a steady $5 billion in security revenue, BlackBerry could be attractive to an acquirer, he thinks. For example, Misek speculates that Microsoft might want to boost its standing in mobile by buying the company.

We may know more soon about what a mobile device management stock is worth. The Wall Street Journal reported in March that Good has met with bankers to discuss a public offering that could value the company at $1 billion.

For the moment, BlackBerry shares will trade based on the market's perception of how the Z10 and Q10, and forthcoming models, sell. But the embedded value of the network is worth keeping an eye on.

In an increasingly complex mobile world, that network is an asset that will likely continue to represent real value.